A Principal Financial news release said its latest Well-Being Index found nearly half of American adult workers (45%) and just under a third of retirees (32%) indicated that their biggest financial planning regret was their delay in starting to save for their nest egg. Around one-quarter of respondents (27% of workers; 22% of retirees) said they regretted saving too little in their early working years.
When asked about the best lesson Americans learned from getting help with their financial planning, the greatest number of respondents (20% of workers; 19% of retirees) listed diversifying their portfolio. Another 16% of workers and 10% of retirees said investing the maximum in 401(k)/403(b) plans, IRAs or non-qualified plans was the best advice they have received.
“While we don’t get a ‘do-over’ in terms of past savings behavior, the good news is, it’s never too late to start and make a plan to sock away just a little bit more,” said Dan Houston, executive vice president, Retirement and Investor Services, The Principal, in the news release. “It’s even easier now with new legislation providing more automated and simplified solutions with advancements like automatic enrollment, automatic deferral step-up programs and lifecycle funds. The law also will make financial planning and investment guidance in the workplace more available.”
The Principal found that 21% of those surveyed who are eligible for their 401(k) plan are not deferring anything. Most (42%) are saving between 5% and 10% of their paychecks.
When it comes to thinking ahead to retirement, many financial issues are keeping Americans awake at night. More than four in ten (43%) US adult workers, and 26% of retirees, said worries about the ability to afford good medical care keeps them from slumber, followed by worries of being able to enjoy the same quality of life they live now (42% of workers) and being able to afford basic necessities in retirement (38% of workers). The slumber-disrupting issue cited most often by retirees (37%) is the rising cost of inflation reducing purchasing power.
When asked if they have a plan to transition retirement savings into a steady income in retirement, only 30% of workers and half (51%) of retirees do have a plan.
The index, which surveys American adult workers at businesses with 10 to 1,000 employees, is released each quarter by the Principal Financial Group and conducted by Harris Interactive.